Boeing (BA -4.2%) briefly moves off lows on reports the area of the 787 fire at Heathrow was not where the battery would be located. The 787's twin lithium-ion batteries are installed below the floor in electrical bays near the nose and between the wings, far from the apparent damaged area. But in a separate incident, another 787 was grounded today because of unspecified technical issues.
Precision Castparts (PCP -4.2%) shares sink along with Boeing (BA -6.5%) on news of a fire on a 787 at Heathrow Airport. PCP has large exposure to the continuing manufacturing of 787 aircraft and has been seen as a major beneficiary of a production ramp-up into 2014. Update: Heathrow says no passengers are aboard the parked plane, and arriving and departing flights are suspended.
The Pentagon is planning its first missile test since 2008 on July 5. If successful, the launch will be the first interception in more than four years of a surrogate missile incoming toward the U.S. The test will use interceptors tipped with Raytheon (RTN +0.1%) "hit-to-kill" warheads which last successfully hit their target during a December 2008 exercise, and be operated by Boeing (BA +0.8%).
Boeing's (BA +1%) leasing unit, Boeing Capital, announces additional deployments of its workhorse 717 twinjet. QantasLink, Australia's largest regional airline, will receive an additional five leased 717s to add to its existing fleet of 13 that operate across the country. The deliveries will begin in late 2013 after the aircraft are refitted with upgraded interiors. The Qantas Group has operated the 717s since 2002.
United Technologies (UTX +1.4%) ticks higher today after saying that its subsidiary, UTC Aerospace Systems, has signed a long-term repair license agreement with ST Aerospace for maintenance, repair and overhaul services for UTC Aerospace Systems components on the Boeing (BA) 787 Dreamliner.
Boeing (BA +1.7%) updates its Orders and Deliveries page for the week, saying that since its last update it has received 107 new orders consisting of six 777s and 101 737s. In the Changes category, it reduced 737 net orders by 24. Additionally, the company says that Chinese regulators have cleared local airlines to fly the 787 Dreamliner, and are expected to allow them to launch overseas flights within a matter of months.
Boeing (BA +0.9%) lifts higher as Sterne Agee ups its price on the shares to $120 from $100. The firm says that with the Dreamliner fiasco largely behind them, its free cash flow could top $18B over the next three years. The stock has typically traded at a 10-12 multiple to free cash flow, so with book-to-bill for the commercial aircraft sector staying above 1 at least through next year it sees the stock moving "towards the peak in the cycle."
Boeing (BA +0.8%) rolls out the first 787 Dreamliner to be produced at its new seven-per-month rate, with a targeted monthly output of 10 by year's end. The latest aircraft is due to be delivered to British Airways. To date, 50 Dreamliners have been delivered to eight airlines. The program has more than 800 unfilled orders with 58 customers worldwide. Separately, SocGen has upped the shares to a Hold today as well.
More on Boeing (BA) Q1 earnings: Core operating earnings of $1.9B, up 14% Y/Y. Core operating margin of 9.9%, up 80 bps from a year ago. Backlog of $392B, up $2B from end of 2012. Net orders of $20B during Q1. FY2013 outlook of $82B-$85B in revenue and core EPS of $6.10-$6.30 is reaffirmed. Conference call 10:30 ET (presentation slides). Shares +3.3% premarket. (PR)
The FAA's go-ahead on battery system improvements for the 787 Dreamliner clears the way for Boeing (BA +2.2%) to install the approved modifications, leading to a return to service and resumption of new production deliveries. The improved battery system includes design changes to both prevent and isolate a fault should it occur, including a new steel enclosure system designed to keep any level of battery overheating from affecting the airplane. BA reiterates once again that it expects that the battery issue to have no significant impact on its FY13 financial guidance.
While Boeing (BA +0.7%) continues to work with the FAA to gain clearance on its Dreamliner battery fix, United Continental (UAL +2.8%) says it expects to start running some flights of the 787 sooner than expected. The airline plans to restart some flights in Chicago by May 31st, while its Houston-Heathrow and Denver-Tokyo international flights are targeted to resume on June 10, though no specific flights were named.
Boeing (BA +1.4%) reports the completion of a "straightforward and uneventful" 787 certification demonstration flight today today with a Boeing-owned production airplane built for LOT Polish Airlines. Today's flight marks the final certification test for the new battery system, and completes the required FAA testing. BA now plans to gather and analyze the data and submit the required materials to the agency for further dialog.
Just when you think the smoke has cleared: Mitsubishi Motors (MMTOY.PK) reports two recent accidents involving lithium-ion batteries manufactured by its joint venture with GS Yuasa (GYUAF.PK), the maker of batteries used in Boeing's (BA -1.1%) grounded 787 Dreamliner. The Japanese auto maker said a lithium-ion battery pack used in its i-MiEV model electric car caught fire while charging during a test inspection at a company plant in Okayama last week, while in another incident, a battery installed in one of its Outlander PHEV hybrids overheated, melting the cell and part of the battery pack.